GSJBW gets a new name – and rating

The storied Melbourne stockbroking house founded by Jonathan Binns Were was all but buried yesterday when Goldman Sachs JBWere finally revealed it will drop the nostalgic “JBWere" tag and rename itself Goldman Sachs & Partners.

The name change, effective from August 2, marks the completion of the sale of 80.1 per cent of the JBWere private client business to
National Australia Bank
last year.

In truth, the famed House of Were has been fading for a long time under Goldman Sachs’ stewardship.

The influence of Wall Street has increased progressively since the 2003 deal between the two firms was sealed.

Early last year, the resignation of co-chief executive and executive chairman,
Craig Drummond
– a JBWere staffer of more than 20 years – was perceived as a blow to the profile of the private client side of the business because it paved the way for dual Goldman Sachs management for the first time in the merged firm’s history.

More significantly, it was the first time in 169 years that the Collins Street firm was not run by a JBWere stalwart.

GSJBW is 45 per cent-owned by Goldman Sachs. The alliance was forged by JBWere veteran
Terry Campbell
.

Mr Campbell endorsed the NAB deal because it introduced new growth opportunities. He told The Australian Financial Review at the time: “I would be less than honest if I didn’t say it is nice to see the JBWere name will be perpetuated in an Australian form. I see it as an Australian brand now owned by an Australian bank."

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In an email to staff, GSJBW’s Australian co-heads
Simon Rothery
and
Stephen Fitzgerald
said: “The new company name and logo reflects our unique ownership structure in Australia and New Zealand while also demonstrating the continued convergence of our businesses with Goldman Sachs around the world."

The name change remains subject to shareholder approval.

More than 100 Australian executives hold the remaining shares in an Australian-domiciled company. In a surprise move, Mr Drummond recently surfaced as the country boss of Bank of America-Merrill Lynch.

Separately, ratings agency Moody’s assigned its first ratings to GSJBW entities, including GSJBW Capital Markets (A2/Prime-1), GSJBW (A2/Prime-1) and GSJBW Group (A3/Prime-1). All the ratings carry a negative outlook to reflect the negative outlook of the Goldman Sachs Group.

In its release, Moody’s said its ratings “incorporate the capacity to increase and further diversify its funding sources", which for GSJBW comprise retail investment notes and banking facilities.

It also noted how closely the ratings were associated with those of Goldman Sachs.

“In some situations, such as certain types of trading activities, GSJBW transfers all credit and market risk to the Goldman Sachs Group," the Moody’s release said. “However, GSJBW retains risk in other activities such as proprietary trading, or shares risk with Goldman Sachs Group, for example in underwriting and relationship lending. Where GSJBW retains risk, we view the expertise of the Goldman Sachs Group to be an important asset in managing the risk/reward trade-off."